Section 28 of the Income-tax Act, 1961.
Preface : Meaning of broken period interest.
5. The assessee-American Express International Banking Corporation ... interest income under Section 18 , i.e., under the head "Interest on securities". Once the Department seeks to assess broken period interest under
assessee with regard to depreciation and investment allowance and broken period interest. The basis for reopening was the decision of the Supreme Court ... period upto the date of sale. Similarly, during the said periods, the assessee purchased Government securities-cum-interest and paid interest for the broken period
Additions
1. Depreciation on securities 59,27,74,569
2. Broken period interest 9,98,67,263
3.Brokeragepaid 28,000
4. Expenditure for earning ... addition of Rs. 9,98,67,263/- on account of broken period
interest paid on the securities holding that when the securities forming
part
vide impugned order granted relief on the issue of Broken period
interest of Rs.14,51,83,335/- and also granted relief on account ... granting relief
on account of addition made on broken period interest. The facts set out
by the Assessing Officer on the above addition
debited an amount of Rs.1811,68,18,261/- as broken
period interest in its profit and loss account. On a perusal of the details ... observed by the A.O that the aforesaid broken period interest comprised of viz.
(i) Rs.21,31,56,830/- for AES category
made on account of excess of
broken period interest over the broken period interest received.
3. Deleting the addition ... deduction, for the
broken period interest paid. With this it has been found, that since the
interest received for the broken period has been taxed
broken period interest as against similar interest paid by Bank in respect of sale of the securities i.e., the assessee received broken period interest ... disallow the broken period interest in respect of the permanent securities held as the investment and allow the interest for a broken period in respect
depreciation on
investment'
B) Disallowance of
broken period interest
Rs.19,11,491/-
3. ITA No.349/Asr/2012 2006-07 Revenue Against penalty ... submitted that broken
period interest was debited in the P&L Accounts and the entire interest
was credited to 'interest earned head
this regard has also been
found correct.
(ii) As regards broken period interest, the case laws cited by the
assessee [Citibank N.A. (Civil Appeal ... case. In the present
case, it is not the case that broken period interest realized on sale have
11
ITA No.3724/Mum/2013
consideration it had taken into account in the books of account broken period interest on these securities calculated up to 31st March. In the assessment ... broken period interest to its P&L a/c. However, while filing returns of income the interest income for the broken period is excluded
